New Deals: A commercial painting contractor, access control business, and 3 other finds

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NEW DEALS

1/ Commercial Painting Contractor

📍 Location: California
💰 Asking Price: $1,750,000
💼 EBITDA: $647,997
📊 Revenue: $2,002,436
📅 Established: 1974

💭 My 2 Cents: This contractor, located in Silicon Valley, focuses on both interior and exterior commercial maintenance painting for clients in the high-tech, education, and public sectors. Maintenance painting is highly recurring and even in downturns, schools still operate, governments still fund facilities maintenance, and tech campuses still need base-level maintenance. I like their 50 years of operational history, solid base of repeat clients, compact but experienced 11-person crew, and strong cash flow and margins. I’d want to look into their revenue breakdown between the different sectors they service, if there is any risk of client concentration, their client retention rate and if they have any formal contracts or long term service agreements in place, any expiring or rebidding contracts, how competitive the bidding process is in their local market, and the condition of any FF&E included in the sale. The seller is open to remaining temporarily as RMO/RME to assist with licensing during a transition, but notes that they handle all bidding and client relationships and a buyer needs to be prepared to replace them.

2/ Access Control Business

📍 Location: South Carolina
💰 Asking Price: $2,100,000
💼 EBITDA: $622,000
📊 Revenue: $5,100,000
📅 Established: 1999

💭 My 2 Cents: Access Control businesses provide and install systems that control who can enter or access physical spaces, and often track movement through those spaces (think of them as the gatekeeper for buildings). This is an industry with growing demand as more more businesses, schools, and institutions are upgrading to electronic access systems, and these systems often come with recurring service revenue from monitoring and maintenance. This business has carved out a leading position, providing a full range of sales, installation, and support services to a diverse client base. I like their 25-year track record, well-trained team of 11, and consistent strong profitability. What also stands out, given their lean operation, is their ready scalability, with the highly fragmented building access market offering plenty of room for bolt-ons or regional expansion. I’d want to know what percentage of their revenue comes from one time installs vs recurring service agreements, what systems they install, whether they are an authorized dealer or certified installer with key brands and if they have any exclusive territories or pricing advantages, how they bring in new business, if they use any subcontractors for installations, and if additional assets would be needed to scale their operations. Assuming they have a steady base of recurring contracts, this looks like a sure cash producer with a lot of growth potential.

3/ Drainage Contractor

📍 Location: California
💰 Asking Price: $1,191,000
💼 EBITDA: $526,262
📊 Revenue: $754,474
📅 Established: 2015

💭 My 2 Cents: Drainage issues don’t wait for the economy—flooding, erosion, and foundation damage must be addressed ASAP, and property owners often have no choice but to pay. This drainage and encapsulation company is capitalizing on the rising demand for services to address climate-related moisture issues in California’s housing stock. I like their low fixed overhead and, related to this, their really high (70%) margins, their use of a mix of full-time workers and independent contractors, and the $210K in FF&E included in an already low-multiple asking price. However, I’d need more detail on what kind of work their independent contractors do and ensure they’re performing truly independent specialty work, since California’s AB5 law cracked down on independent contractors. I also want to understand how they source new work, who their main competitors are, what the scope and duration of their typical project looks like, the replacement schedule and remaining life on their excavators, trenchers, augers, and trucks, and who the license holders are in the business and what kind of transition they’d be open to. With a solid transition plan in place, this could be a real winner.

4/ Two Auto Body Shops

📍 Location: New York
💰 Asking Price: $9,400,000
💼 EBITDA: $2,300,000
📊 Revenue: $6,900,000
📅 Established: 1982

💭 My 2 Cents: I’m a big fan of auto body shops for their consistent flow of work from insurance-driven repairs. These two five-star shops are located in an affluent area of Nassau County, NY, where the barriers to entry for new auto body shops are very high, and many areas explicitly ban new auto repair/body shops from opening. Operating from well-equipped facilities, together they handle over 25 cars weekly, providing everything from collision and paint repair to inspections and glass replacement. I’d need more info on the work relationship between the two shops, mainly whether they operate independently or benefit by sharing their capabilities, labor, and customers between them. I’d also need to dig into the sale or lease terms for the two facilities, the current condition and expected lifespan of their equipment, if there are any challenges in recruiting and retaining skilled technicians, what partnerships they have in place with major insurance companies and local dealerships, what the local licensing and regulatory requirements are, and if they could handle more work given current assets. In a final positive for what is already an attractive deal, the seller is offering financing and is open to staying for up to a year post-close, underscoring their commitment to the future of the business.

5/ Commercial Landscaping Business

📍 Location: South Carolina
💰 Asking Price: $3,200,000
💼 EBITDA: $800,000
📊 Revenue: $2,500,000
📅 Established: 2013

💭 My 2 Cents: Commercial landscaping is great for the recurring contracts, but it's always a plus when a landscaping business is located in an area like Myrtle Beach where there is year-round demand for their services. In operation for 12 years, this commercial landscaping and grounds maintenance franchisee has a proven track record of consistent year-over-year growth. They have a robust 20-person team, pointing to their ability to handle large or multiple projects, and they come with $600K in FF&E, including trucks, mowers, and associated equipment (check condition!). As with all franchise resales, there are a host of potential benefits and challenges as compared with buying an independent business. It’ll be very important to understand all of the franchise agreement's specifics, including any requirements or restrictions, territory limitations, fees, support provided, and transfer policies. I’d also need to better understand their level of recurring revenue and what % of customers are under contract, average contract length, if there is any client concentration (i.e. from HOAs), how they bring in new work, what the lease terms for their facility are, and labor force retention rates. Once comfortable with the franchise agreement, you should be able to count on this being a steady cash cow (that could also continue to grow).